ARBITRATION UNDER W.I.P.O.

[Mr. M. GOVINDARAJAN]

INTRODUCTION:

Arbitration is not a new phenomenon. It has spreaded all over the world. Arbitration is an alternative way of disposing of the disputes especially in business sector for the civil suits, which are time consuming. In the International scenario arbitration and judicial procedures are for the settlement of disputes relating to legal rights of the parties, resulting in an award binding on the parties. The International Law Commission, 1958 has defined arbitration as the procedure for the settlement of disputes between states by a binding award on the basis of law and as a result of an undertaking voluntarily accepted. The history fo settlement of international disputes through arbitration dates back from Jay Treaty, 1794 between England and the United States. The Hague Convention, 1899 created the Permanent Court of Arbitration. However the establishment of the Permanent Court of International Justice, in 1920, did not abolish the Permanent Court of Arbitration rather the General Act adopted by the General Assembly on April 28, 1949 provided in detail about arbitration in Chapter III of the Act. After the second world war a large number of arbitral tribunals were established. Various specialized agencies were formed and brought into relationship with United Nations in accordance with the Article 63 of the UN Charter. World Intellectual Property Organization (WIPO) is one of the specialized organizations established by a Convention on 14.7.1967. WIPO became a specialized agency of the UN by the General Assembly resolution 3346 (XXIX) of December 17,1974. The objective of the WIPO is to promote the protection of intellectual property throughout the world co-operating with the Paris Union (1883) and the Berne Union (1886).

ARBITRATION:

Arbitration is a procedure to settle the dispute, instead of going to court, by one or more arbitrators who make a binding decision on the dispute. The following are the characteristics of arbitration-

* Consensual;

* Parties are having right to choose the arbitrator(s);

* Neutral proceedings;

* Confidential proceedings;

* Decision of the arbitral tribunal is final and easy to enforce.

ARBITRATION FOR INTELLECTUAL PROPERTY RIGHTS:

In the present scenario, the intellectual property rights should be protected. The Intellectual property right is having commercial value. The disputes in respect of intellectual property may arise between the parties placed in a contractual agreement viz., trademark licence agreement, technology transfer, copy right licence agreement etc., To settle the dispute in respect of intellectual property right by means of arbitration is better than the court litigation due to the following reasons-

* Multiple proceedings under different law, with risk of conflicting results;

* Decision maker might not have relevant expertise;

* Procedure often drawn out;

* Possibility of appeal resulting in time consuming;

* Public proceedings;

Whereas the arbitration proceedings for an IPR dispute is having the following features-

* A single proceeding under the procedure determined by parties;

* Parties can select arbitrator(s) with relevant expertise;

* Arbitrator(s) and parties can shorten the procedure;

* Limited appeal option;

* Proceedings and award are confidential.

The IPR is having international commercial value. Arbitration is increasingly being used to resolve disputes involving intellectual property rights, especially when involving parties from different jurisdictions. Arbitral procedure and nationality of arbitrator can be neutral to law, language and institutional culture of the parties.

ARBITRATION UNDER WIPO:

WIPO Arbitration and Mediation Center (hereinafter referred to as 'Center') was established in 1994 to offer alternate dispute resolution in the intellectual area. The center offers arbitration, expedite arbitration and mediation to settle the commercial disputes. Mediation is non-binding procedure. The mediator is a neutral intermediary, assists the parties in reaching a settlement of dispute. If the mediation procedure is failed, it will be followed by arbitration. Arbitration is a neutral procedure in which the dispute is submitted to one or more arbitrators to make a binding award on the dispute. Expedite arbitration is the procedure that is carried out in a short time and reduced costs. This article will enlighten the provisions of arbitration under WIPO to settle the disputes. Arbitration under WIPO is yet another wide area of practice for the professionals especially for Practising Company Secretaries. Arbitration Rules contain VIII chapters-

> Chapter I - General provisions (Article 1 to 5)

> Chapter II - Commencement of Arbitration (Article 6 to 13)

> Chapter III- Composition and establishment of the Tribunal (Article 14 to 36)

> Chapter IV - Conduct of the Arbitration (Article 37 to 58)

> Chapter V - Awards and other decisions (Article 59 to 66)

> Chapter VI - Fees and Costs (Article 67 to 72)

> Chapter VII - Confidentiality (Article 73 to 76)

> Chapter VIII - Miscellaneous (Article 77 & 78)

APPLICATION OF RULES:

1. Where an arbitration agreement provides for arbitration under the WIPO Arbitration Rules, these rules shall be deemed to form part of that Arbitration agreement.

2. The disputes shall be settled in accordance with their rules unless the parties have agreed otherwise.

3. These rules are not having overriding effect. Article 3 provides that these rules shall govern the arbitration, except that, where any of these rules is in conflict with the provisions of the law applicable to the arbitration from which the parties cannot derogate.

4. The law applicable, according to article 59(b) to the arbitration shall be the arbitration of the place of arbitration, unless the parties have expressly agreed on the application of another arbitration law and the law of arbitration permits such agreement.

PROCEDURE:

The procedure involved in WIPO arbitration is-

* Request for arbitration

* Composition and establishment of the tribunal

* Appointment of Arbitrators

* Jurisdiction and place of tribunal

* Conduct of Arbitration

* Awards and other decisions and its effect.

REQUEST FOR ARBITRATION:

1. The claimant shall make a request for arbitration to the WIPO Center and also to the party to the agreement to settle the dispute as per the agreement entered into by them.

2. The request for arbitration shall contain-

- a demand that the dispute be referred to arbitration under WIPO rules;

- the name, addresses and telephone, telefax, e-mail or other communication references of the parties of the claimant;

- a copy of the arbitration agreement;

- a brief description of the nature and circumstances of the dispute.

3. The statement of claim shall be accompanied the request for arbitration which shall contain a comprehensive statement of the facts and legal arguments supporting the claim including a statement of relief sought along with documentary evidence.

4. If the statement of claim has not been submitted initially, the claimant shall, within 30 days after the receipt of notification from the center of the establishment of the tribunal shall submit the same to the tribunal and the respondent.

1. The date of commencement of arbitration shall be the date on which the WIPO center received the request for arbitration from the claimant.

2. On receipt of the request the WIPO center shall inform the claimant and the respondent of the receipt of the request of Arbitration by it and of the date of commencement of the arbitration.

3. Within 30 days from the date on which the respondent receives the request for arbitration the answer to the request which shall contain comments on any of the elements in the request for arbitration and may include indication of any counter claim or set off and statement of defence if any, shall be sent to Center with a copy to the claimant.

COMPOSITION OF THE TRIBUNAL:

1. The tribunal shall consist of such number of arbitrators as has been agreed by the parties.

2. Where the parties have not agreed on the number of arbitrators the Tribunal shall consist of a sole arbitrator or three arbitrators as is appropriate.

APPOINTMENT OF ARBITRATORS:

1. If the parties have agreed on a procedure for the appointment of the arbitrator(s) then that procedure shall be followed.

2. If the parties have not agreed on an appointment procedure the following procedure shall be followed:

* Where a sole arbitrator is to be appointed the sole arbitrator is to be appointed jointly by the parties;

* Where three arbitrators are to be appointed, the claimant shall appoint an arbitrator in the request for arbitration;

* The respondent shall appoint an arbitrator within 30 days from the date on which it receives the Request for arbitration;

* The two arbitrators appointed, shall within 20 days after the appointment of second arbitrator shall appoint a third arbitrator, who shall be the presiding arbitrator.

3. If the parties failed to appoint in presiding or sole arbitrator then according to Article 19, the WIPO Center shall send to each party an identical list of candidates. Each party shall return the marked list to the center within 20 days from the date of receipt of list. If it is not returned it shall be deemed to have assented to all candidates appearing on the list.

- The Center shall taking into account the preferences and objections expressed by the parties invite a person from the list to be the sole or presiding arbitrator.

- If the list is not acceptable to both parties the Center shall be authorized to appoint the sole or presiding arbitrator.

4. An agreement of the parties concerning the nationality of arbitration shall be respected.

5. Each arbitrator shall be impartial and independent. May be if, at any stage, during the arbitration, new circumstances arise that give rise to justifiable doubt to any arbitrator's impartiality or independence, the arbitrator ought to promptly disclose such circumstances to the parties, to the center and other arbitrators.

6. Each arbitrator shall accept the appointment in writing and shall communicate such acceptance to the Center.

7. The Center shall notify the parties of the establishment of the tribunal.

JURISDICTION AND PLACE OF ARBITRATION:

1. The Tribunal shall have the power-

* To hear and determine objections to its own jurisdiction, including any objections with respect to form, existence, validity or scope of arbitration agreement;

* To determine the validity of any contract of which the arbitration agreement forms part or to which it relates;

2. A plea that the Tribunal does not have jurisdiction shall be raised not later than in the Statement of Defence or with respect to a counter claim or a set-off, the statement of defence thereto failing which such plea shall be barred in the subsequent arbitral proceedings or before any court.

3. If the tribunal is exceeding its authority it may be objected immediately during the arbitral proceedings;

4. The tribunal may rule on the plea as a preliminary question or in its sole discretion, decide on such plea in the final award.

5. The plea of arbitration, unless otherwise agreed by the parties, shall be decided by the Center, taking into consideration any observation of the parties and the circumstances of the arbitration.

6. The Tribunal may, after consultation with the parties, conduct hearings at any place that it considers appropriate.

7. The award shall be deemed to have been made at the place of arbitration.

CONDUCT OF ARBITRATION:

1. The Tribunal may conduct the arbitration in such manner as it considers appropriate.

2. The Tribunal shall ensure that the parties are treated with equality and that each party is given a fair opportunity to present its case.

3. The Tribunal shall ensure that the arbitral procedure takes place with due expedition. It may extend in exceptional cases a period of time fixed by the rules by itself or agreed to by the parties.

4. The language of the arbitration shall be the language in the arbitration agreement. The Tribunal may order that any documents submitted in languages other than the language of arbitration be accompanied by a transaction in whole or in part into the language of arbitration.

5. After the making of counter claim or set off the tribunal may, in its discretion, allow or require further written statements.

6. A party may amend its claims, counter claims, defence or set off during the course of proceedings unless the tribunal considers it inappropriate to allow such amendments

7. The tribunal, at the request of a party, may issue any provisional order or take other interim measures it deems necessary including injunctions and measures for the conservation of goods which form part of the subject matter in disputes such an order for their deposit with a third person or for the sale of perishable goods, subject to appropriate security being furnished by the requesting party.

8. The Tribunal may order any party to provide security for the claim or counter claim as well as for costs.

9. The tribunal may, in general, following the submission of statement of defence, conduct a preparatory conference with the parties for the purpose of organizing and scheduling the subsequent proceedings.

10. The tribunal shall determine the admissibility, relevance, materiality and weight of evidence.

11. At any time during the arbitration the tribunal may order a party to produce such documents or other evidence as it considers necessary or appropriate.

12. The Tribunal may inspect or required the inspection of any site, property, machinery, facility, production line etc.,

13. If the tribunal determines that the information is to be classified as confidential it shall decide under which conditions and to whom the confidential information may in part or in whole be disclosed and shall require any person to whom the confidential information is to be disclosed to sign an appropriate confidential undertaking.

14. The Tribunal shall hold a hearing for the presentation of evidence by witnesses including expert witnesses, or for oral argument or for both at the request of other parties.

15. If no hearings are held the proceedings shall be conducted on the basis of documents and other materials.

16. In the event of a hearing the tribunal shall give the parties adequate advance notice of the date, time and date thereof.

17. Unless the parties agree otherwise, all hearings shall be in private.

18. Any witness who gives oral evidence may be questioned by each of the parties. The tribunal may put questions at any stage of the examination of the witnesses.

19. A party shall be responsible for the practical arrangements, costs and availability of any witness it calls.

20. The tribunal may after consultation with the parties appoint one or more independent experts to report to it on specific issues. The Tribunal shall communicate a copy of the report of the expert to the parties to give opportunity to give opinion on the report. The parties, at the request, shall be given the opportunity to question the expert at a hearing.

21. If the claimant fails to submit its statement of claim the tribunal shall terminate the proceedings.

22. If the respondent fails to submit the statement of defence the tribunal may proceed with the arbitration to make the award.

23. The Tribunal shall declare the proceedings closed when it is satisfied that the parties have had adequate opportunity to present submissions and evidences.

24. The Tribunal may, if it considers it necessary owing to exceptional circumstances, decide on its own motion or upon application of a party, to reopen the proceedings it declared to be closed at any time before the award is made.

FEES:

The following are the fee structure in respect of arbitration under WIPO:

Registration fee for any amount in dispute - 2000 $;

Administration Fee - Dispute Amount - Up to 2.5 M $ - 2000 $;

$2.5 M to $10 M $ - $ 10000;

$10M - $10000 + 0.05% of amount over $10M

upto a maximum fee of $ 25000;

Arbitrator(s) Fee - As agreed by the Center in consultation with the parties and the Arbitrator(s) - Indicative rate(s) $ 300 to $ 600 per hour.

WHO CAN APPEAR?

Article 13 of WIPO Arbitration Rules provides that persons of their choice, irrespective of, in particular, nationality or professional qualifications may represent the parties. The Company Secretary, being legally more qualified professional is the right person to appear before the arbitral tribunals constituted under the provisions of WIPO Arbitration Rules on behalf of the parties. It is the potential area for the practising Company Secretaries to practice in the international level.

AWARD AND OTHER DECISIONS AND ITS EFFECTS:

1. The tribunal shall decide the substance of dispute in accordance with the law of the rules chosen by the parties. Failing a choice by the parties the Tribunal shall apply the law or rules of law that it determines to be appropriate.

2. Unless the parties have agreed otherwise, where there is more than one arbitrator, any award, a majority shall make order or other decisions of the Tribunal. In the absence of majority the Presiding Arbitrator shall make the award, order or other decisions as if acting as sole arbitrator.

3. The Tribunal may make preliminary, interim, interlocutory, partial or final award.

4. The award shall be in writing and shall state the date on which it was made, as well as the place of arbitration.

5. The award shall be signed by the arbitrator(s).

6. The award shall state the reasons on which it based unless the parties have agreed that no reasons should be stated and the law applicable to the arbitration does not require the statement of such reasons.

7. The Tribunal may consult the center with regards to matters or form, particulars, the enforceability of the award.

8. The award shall be communicated by the Tribunal to the Center, which shall formally communicate an original of the award to each party.

9. The final award should, wherever reasonably possible be made within 3 months from the closure of the proceedings. If the final award is not made within 3 months as stipulated, the Tribunal shall send the center a written explanation for the delay with a copy to each party.

10. The award shall be effective and binding on the parties as from the date it is communicated by the Center.

11. If the parties agree on a settlement of the dispute before the award is made the Tribunal shall terminate the arbitration proceedings, record the settlement in the form of a consent award. The Tribunal shall not be obliged to give reasons for such an award.

12. Within 30 days from the date of receipt of the award, a party may, by notice to the Tribunal, with a copy to the Center and to other party, request the tribunal to correct in the award any clerical, typographical or computational errors. The Tribunal shall make the corrections within 30 days after the receipt of the request, if it considers to be justified. Any correction, which shall take the form a separate memorandum signed by the tribunal, shall become part of the award.

13. The tribunal may correct any error suo motu within 30 days after the date of the award.

14. A party may, within 30 days after the receipt of the award, by notice to the Tribunal, with a copy to the other party, request the tribunal to make an additional award as to claims presented in the arbitral proceedings but not dealt with in the award. After giving reasonable opportunity of being heard, the Tribunal shall, if it considers the request to be justified, make the additional award within 60 days of receipt of the request.

15. The Tribunal, in its award, shall fix the costs of arbitration which shall consist of-

> The arbitrator's fees;

> The properly incurred travel, communication and other expenses of the arbitrators;

> The costs of expert advice and such other assistance required by the tribunal;

> Such other expenses as are necessary for the conduct of the arbitration proceedings, such as the cost of meeting and hearing facility.

16 The Tribunal, in the award, subject to any contrary agreement by the parties and in the light of all the circumstances and the outcome of the arbitration, order a party to pay the whole or part of reasonable expenses incurred by the other party in presenting the case, including those incurred for legal representatives and witnesses.

CONFIDENTIALITY:

Unless the parties agree otherwise, the Center and arbitrator shall maintain the confidentiality of the arbitration, award and to the extent that they describe information that is not in the public domain, any documentary or other evidence disclosed during the arbitration except to the extent necessary in connection with a court action relating to the award, or as otherwise required by law.

EXPEDITE ARBITRATION:

As expedited arbitration is meant for shot time and reduced cost the WIPO Expedited Arbitration Rules provides for the appointment of sole arbitrator only. The sole arbitrator is appointed by the Center. The sole arbitrator shall issue a final award within six weeks from the date of the commencement of arbitration. The registration fees and administration fees are lower than the rate applicable to WIPO Arbitration Rules. The statement of claim must accompany with the request for arbitration. The Statement of defence must accompany with the answer to the request for arbitration. The hearings in this case may not exceed three days.

ROLE OF WIPOCENTER:

The WIPO Arbitration and Mediation Center, to facilitate the resolution of intellectual property disputes-

* Helps parties to submit existing disputes to WIPO procedures if they had not previously agreed on a WIPO clause;

* Assists in the selection of mediators and arbitrators;

* Liaises with parties and arbitrators to ensure optimal communication and procedural efficiency;

* Arrange support services including translation, interpretation and secretarial services.

* If the procedure is held at WIPO in Geneva, the rooms are provided free of charge;

* develops tailor-made dispute resolution procedures for specific commercial circumstances or industry characteristics;

* makes available the WIPO Electronic Case Facility (WIPO ECAF) which allows parties to submit communications electronically into an online docket. WIPO ECAF also provides a summary of case information, an overview of timelines, contact information for all parties and the finance status of the case; All information stored in WIPO ECAF is firewall protected and encrypted by using the modern Secure Socket Layer (SCL) Technology.

CONCLUSION:

WIPO arbitration or mediation can take place anywhere in the world. According to the WIPO rules the parties are free to select any place of arbitration, venue or language that suits the circumstances of the disputes. WIPO clauses can be found in a wide varieties of contract involving intellectual property including patent, know-how, software licences, franchisees, Trade Mark co-existence agreements etc., The Center assists the parties to the disputes in all respects. The parties to the dispute, therefore, may avail these procedures by including WIPO clause for arbitration in the contract.

REFERENCE:

1. WIPO Arbitration Rules

2. www.wipo.int